The best bidding method for your CRE sourcing initiative: A comparative analysis of popular competitive methods

Kate Vitasek and Magnus Kuchler
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Kate Vitasek: Faculty member, University of Tennessee, USA
Magnus Kuchler: Partner, EY Advisory Services, Sweden

Corporate Real Estate Journal, 2020, vol. 9, issue 3, 256-267

Abstract: Every day hundreds of organisations conduct competitive bids to pick the best suppliers to meet their needs. Unfortunately, too many organisations are using the wrong competitive bidding tools for the wrong job. This often results in the selection of the wrong supplier or development of a contract that is not aligned with the organisation’s objectives. Using the wrong competitive bidding method is like putting a square peg in a round hole; forcing a fit is myopic and inefficient. To further complicate things, newer, more collaborative approaches have emerged that tout the benefit of allowing buyers to gain insight and improved supplier innovation through more collaboration with suppliers during the bidding process. Today’s corporate real estate (CRE) professionals should understand — and enthusiastically embrace — the entire suite of tools in the sourcing toolkit and carefully select the most appropriate competitive bidding method for their situation. This three-part paper provides a deep dive into competitive bidding practices and challenges CRE organisations and their sourcing counterparts face in their quest to ensure they are deploying sourcing best practices. Part 1 (this paper) provides an overview of each of the competitive bidding methods and outlines what each is and when it should be used. The paper answers the question, what is the right tool for your situation? Part 2 delves into research by the University of Tennessee on the use of collaborative bidding practices — especially the request for partner method. Finally, Part 3 provides a case study of how one CRE organisation successfully deployed a request for partner to shift from working with 20 suppliers to one strategic partner.

Keywords: facilities management; corporate real estate; competitive bidding methods; sourcing business models; procurement; outsourcing; bid process (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2020
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